Artwork by Naomi Kim

Gaining Traction

Located just above Silicon Valley, the Western Canadian startup ecosystem is becoming increasingly successful in fostering the growth of startups, particularly those in tech. Vancouver, for example, leads the top 30 U.S. and Canadian tech markets in high-tech job growth, with a growth rate of 29.2% over the past two years. The ecosystem has seen substantial growth in financings, with a 150% increase in just the past decade. The growing success rate of startups in Western Canada has also dramatically increased the talent pool, further building the ecosystem’s momentum. 

Attracting tech talent has now become one of the ecosystem’s strengths, but it was not always the case. Applying for a tech job in Vancouver as a university student, for example, was not always viable or attractive. NBR’s mission has always been to foster student thought leadership, creativity, and innovation, so it was only fitting to highlight the growing opportunity to scale startups or work in technology in Western Canada.

This semester, NBR established its official blog Pitch Deck to explore the unique challenges, needs, and strengths of Western Canada’s Start-up Ecosystem. Our goal with this initiative is to highlight the merits of entrepreneurship for university students entering a business environment and job market of increasing uncertainty. Further, COVID-19 has demonstrated the need for innovation and problem solving at lengths never seen before. We hope to drive discourse on the ecosystem and its exciting developments to encourage the growth of its community.

Pitch Deck features profiles of UBC Alumni leading captivating startups that are developing Vancouver’s innovation economy. The first few companies and founders profiled are interrelated: NBR was grateful to interview Jay Rhind, Partner at Rhino Ventures, an early-stage venture capital fund that has invested in Jason Smith’s Klue and Greg Smith’s Thinkific. Together and on their own, they have played a role in crafting the narrative of the region’s growing startup scene.

Rhino Ventures: The True Entrepreneurial Journey

The moniker “Rhino Ventures” was inspired by how rhinos are tough and thick-skinned—traits required in startup founders in order to build a successful company. Jay Rhind, Partner at Rhino Ventures, embodies this himself. His entrepreneurial experience led him to connect with fellow UBC Sauder MBA grad Fraser Hall; they bonded over the challenges of entrepreneurship and that was when the idea for Rhino Ventures was born.

In late 2016, the two raised a micro fund—or minimum viable fund as Jay calls it—of $14 million CAD under the name of “Vancouver Founder Fund”. Their thesis was to invest in the best and brightest entrepreneurs building venture scale success stories across Western Canada. In the middle of 2019, they rebranded themselves to the well known “Rhino Ventures”; a name that was an even “better representation of the entrepreneurial journey than a Unicorn”. Rhino Venture’s purpose continued to be inspired by addressing the massive market gap between the quantity and quality of early-stage capital serving the Vancouver start-up ecosystem. Jay noted that the severe gap in the market allowed them to have relative success by simply attacking it. They quickly made notable investments in, Thinkific, and Klue, among others. 

For many years, Vancouver experienced underfunding because the majority of Canada’s capital was concentrated in the East, emerging in Toronto and subsequent peripheries like Ottawa and Montreal. However, an innovation renaissance of sorts in Vancouver, particularly over the past 12-18 months, has driven an upswing in funding. It has seen historic raises like Clio’s $330M Series D round—the largest in Canada—and Broadband TV’s $172 million CAD IPO, one of the top 10 tech IPOs on the Toronto Stock Exchange by funds raised. Large Series A raises in the past year include Rhino’s portfolio companies Klue ($19.7 million CAD Series A) and Thinkific ($22 million CAD Series A). Further, many prominent Vancouver tech companies are poised to enter the public markets over the coming quarters. Cymax and Abcellera—which filed for a $200 million USD Nasdaq listing—are two of the most recent publicly-reported possible new issuances. 

As the industry has continued to grow and boast more proven entrepreneurial management, investors are holding a higher willingness to invest in Vancouver startups. This has heightened the momentum in the region and is slowly generating and increasing access to greater mentorship to help serve it. Jay pointed out that the 4 M’s—Management, Mentorship, Momentum, and Money—are the leading indicators of a regional start-up ecosystem’s maturity. Until recently, Jay felt that it was a contrarian position to believe you could build world-class companies and a venture firm that matched the founders' level of ambition in Vancouver. However, with the 4 M’s moving in the right direction, that is fortunately no longer the case. 

Klue: Klues to Succeed 

Klue is a competitive enablement platform that has raised over $25 million CAD from other investors in addition to Rhino, including Craft Ventures, OMERS Ventures, and angel investors Ryan Holmes (Founder of Hootsuite) and Frederic Kerrest (Co-founder of Okta). Klue’s CEO and Co-founder, Jason Smith, a UBC Sauder BCom grad, is a gritty problem-solver who also embodies the idea of a “rhino” entrepreneur. Jason’s early learnings in sales through past entrepreneurial adventures led him to identify a pain point in sales team processes. It was hard to keep track of competitors and their actions. This pain point ultimately led Jason to the idea behind Klue. 

Klue collects and delivers updated competitive intelligence across departments such as Product, Sales, and Customer Success. These data points, collected from several internal and external sources, such as Slack, Salesforce, and email, provide companies with detailed and robust market coverage. Using artificial intelligence and machine learning, Klue synthesizes the data to deliver relevant information about a company’s product, market, and competition to ensure that sales teams have the most up-to-date, relevant information to ensure success.

Competitors are present for every company. Hence, finding a way to gather and utilize data about a company’s competition provides a powerful edge to businesses. By helping other companies efficiently adapt to changing markets, Klue is helping elevate this region’s innovation and momentum which is integral to the success and growth of any startup ecosystem.

Klue has been recognized with numerous awards, including being a finalist in the 2019 Startup World Cup Grand Finale, and being named Company of the Year - Growth Success by BC Tech at the 2020 Technology Impact Awards. Still, in the early stages of success, Klue shows no signs of stopping. It continues to gather investors’ interest and has strong potential for future growth as it makes large strides in competitive enablement.

Thinkific: Lifelong Learners Teaching 

A “rhino” entrepreneur’s most valuable assets are the knowledge and skills they have acquired through building their ventures. However, sharing one’s expertise online can be operationally cumbersome. Greg Smith, CEO and Co-founder of Thinkific—another Rhino Ventures portfolio company—knows this all too well.

Greg graduated with a Bachelor of Commerce from UBC Sauder in 2000 and then studied at UBC’s Allard School of Law. While working as a junior securities lawyer, Greg ran LSAT courses on the side, and decided to take his classes online so he could reach more students. Although his brother, fellow UBC Alumnus Matt Smith, offered to build it for him, they found a lack of digital infrastructure to easily create online courses. That was when the idea for Thinkific was born. Eventually, the two brothers and a few other co-founders launched Thinkific to empower any person with any expertise to create, market, and sell their own online course easily.

The SaaS company is unique from other online learning platforms like MasterClass or Skillshare because they allow educators full autonomy in this way. It provides tools for educators to independently create and sell courses, enabling them to own their brand, customer relationships, and build a sustainable business. These educators are often entrepreneurs or established thought leaders in their respective industries. 

Thinkific saw a 221% surge in users creating courses at the start of the pandemic as a result of the increased demand for online learning during the COVID-19 pandemic. This has allowed Thinkific to expand quickly within the online education industry, which is projected to grow to over US$350 billion over the next five years, with Thinkific being a leading force in Canada.

Thinkific has also received numerous accolades. Thinkific was named one of the Best Workplaces in British Columbia, made the Growth List of Canada’s Fastest-Growing Companies by Canadian Business (ranking 17th out of 415 companies), and was named to Deloitte’s Technology Fast 50 all in this year alone. Rhino recognized their traction early on and has been investing in them since 2015. Since then, Thinkific continues to lead the educational renaissance.

B.C.’s Innovation Economy: A Driving Force 

COVID-19 has shifted the way we approach business and has shown us the importance of innovation. We have had to reimagine a new normal, one which saw the formation of new business archetypes. In embracing novel customer needs and trends, companies have accelerated trends that were already taking place: many have become remote services providers and promoters of the gig economy. Ultimately, “innovative companies are the engines of our future” according to The Honourable Mélanie Joly, Minister of Economic Development. BC’s innovation economy, with the likes of companies like Klue and Thinkific and funders like Rhino Ventures, is developing into its own unique ecosystem. With its growing strength, it is poised to help drive Canada’s innovation economy as a whole forward, creating a stronger foundation for the next set of exciting Canadian startups.